b) Improvisation
to Business Strategy (Not required, the frameworks are all laid in the Business
Analysis part)

Spotify is a commercial music
streaming, podcast and video service that
provides digital rights management-restricted content
from record labels and major media companies. Music can be browsed or
searched by artist, album, genre, playlist, or record label. Paid
"Premium" subscriptions remove advertisements and allow users to
download music for offline listening

a) Business
Analysis:

1) Spotify is
a Technology platform which offers Music, and not the other way round,
effectively meaning that it has to build a competence from technology, along
with its offerings.

2) The aim of
Spotify is to offer music, as the result, it has to open up its gates for all
kinds of music, ideally, it should ideally be a platform for all kinds of
music, music folks, ideally promoting the end to end value chain of music - creation,
distribution and consumption of music

3) In its
current avatar, Spotify’s value differential ratio (Value Creation v/s. Value
Captured) is low. No doubt, its offerings have high acceptability, however the
value transfer is low, making it vulnerable to lower levels of monetization,
losing of consumers, and / or losing out to competition.

4) The theory
of borrowed innovation from last.fm. The Personalisation offering for music is
where Spotify is dependent on Last.fm (another music service provider). By the
means of this, Spotify cannot aspire to be in the climbing up the consumer
value chain (both, in terms of enhancing the experience and creating value).
Spotify will either have to leverage on such market offerings by organic means
to better the Consumer current experience levels.

5) Given that
the music industry is witnessing a jam of players offering similar services,
along with the major media houses flaunting the dominance, the time is possibly
ripe to have a business model innovation in place with effects of disruptions
on the entire value chain of music creation – publishing – distribution chain,
essentially with the framework of technology, and different set of principles.
This point holds valid provided Spotify is able to establish competence in its
product bettering the consumer experience by a substantial differential.

Spotify’s focus on
the getting the supplier on its services while at the cost of adding
experiential value to the consumers will only add the development of Ecosystem
(and not Spotify’s offerings), motivating the competition to enter. Rather, the
thought should be to focus on the other end of the spectrum by adding
experiential value to the consumer, triggering the winning circle of making
Spotify, an open platform to publish music

6) Spotify as
well faces an identity conflict in the value proposition hindering it to
exploit the market value potential of its offering. Given that online Music
space is crunched with players, it makes sense for Spotify to establish itself
as Social Network for Music for the users. Along with having an edge over other
players with a unique proposition, it can as well be an open platform, enabling
better experience value to the consumers.

7) Aligning it
to Consumer Needs and driving the music ubiquity – Not just Music, value props
on Social, Personalised, and for every moment, every mood, to change the state
of mind and hence Spotify’s attempt should be to promote more music rather than
promote more of Monetized Spotify. It does not have sell music which Users
love, rather it has to offer more music so that Users start loving music along
with the stickiness of the experience and value created by Spotify, which can
be a decent strategic advantage.

Differentiation to
experience music with Tech Competence with enhanced value – Cos Music is
experience

8) Offerings
Expansion with refocus on consumer needs on the basis of Competence
(Audiobooks, Videos etc) and Consumer Experience delivered.

9) Aligning
its offerings with the key drivers of the technology (Cos Technology is one of
the factors to create competence), and leveraging its potential of
accessibility across all cross platforms to drive the music ubiquity,
continuity and convergence across all the platforms (hardware + software +
virtual).

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